It's so tedious. I would have literally no idea that Bitcoins existed if it weren't for the flood of articles on HN. I don't understand - who are all the people who find this interesting or relevant?
It's at the intersection of a lot of things that people here find interesting. It's potentially a way to make money (some say ponzi scheme), it has a tech component, there's a anti-government component, etc... so I do believe a lot of people here do care about it. I mean I keep reading the damn articles too...
I think the kernel of contributors with a good-faith interest in bitcoin is smaller than you think it is, but either way: if bitcoin is getting multiples of the attention that the hiring thread is, I think most reasonable HN people can agree that it's being overrepresented.
Lawyering over the site guidelines here isn't productive, since nobody (that I've seen) is arguing that bitcoin contravenes them directly.
I wonder what percentage of HN readers are like me and just skim through the RSS feed every day. The top of the front page and the worthless submission make it into my Google Reader, and I read what I find interesting. Which is great, but at the same time I don't participate in upvoting articles. I would guess the more passive users would be more interested in the hiring thread rather than extremely trendy topics like bitcoin. But that's the tradeoff. I mostly consume rather than contribute, and therefore just take what I get.
The hiring thread is really only relevant to people looking for work, whereas the Bitcoin stuff, even if (imo) overhyped, is relevant to everyone. So I wouldn't argue it is overrepresented.
There are good, solid reasons to believe that today's monetary and fiscal policy is dangerous and wrong-headed (I say that as a liberal closer to Paul Krugman than Ron Paul but sympathetic to some points made by each).
The trouble is that those seeing the current problems look for pig-in-poke solutions rather than getting a solid understanding of what's happening.
I would strongly recommend a critical reading of Doug Noland's Credit Bubble Bulletin, Paul Krugman's blog and at least a university level text on Money and Banking. Also Charles Mackay's classic Extraordinary Popular Delusions and the Madness of Crowds also merits a look.
Many people have an emotional reaction to money. This emotional reaction is part of what can make something "money-like" but if one wishes to understand what's going on, one needs to get beyond one's immediate reaction.
That's a strange thing to say, because Krugman thinks they aren't 'printing' enough money. He says this repeatedly. (He also thinks there are additional, more radical changes that would be more effective, so he can come off as critical of QE because it's not enough.)
You could simultaneously endorse Bitcoin (as a powerful, stabilizing, liquidity-providing, trade-enabling force in the global economy) and at the same time support heavy-handed expansion of local currencies like the dollar (as a powerful, stabilizing, liquidity-proving, trade-enabling force in the local economy). Maybe the world is better with multiple currencies with different properties.
I think it's good to get opinions from solid economists on the right and the left.
And what I would say about recent US government policy is that it has been bad when measured by either Keynesian OR monetarist yardsticks.
This is essentially because the massive growth of US financial obligations has gone ultimately to bailing out the large financial institutions rather than to any Keynesian job creation scheme. So essentially you have a situation where neither the free market nor government do anything to create jobs.
Krugman can legitimately say the Federal budget deficit as such is not high. What massively inflating is the "other obligations" - Fannie Mae bonds, student loan bonds, etc. Here we have massive "inflationism" (as Doug Noland would term it).
Krugman is a partisan so he's glossed over the unneeded spending of the bailout in later commentary but he did say "The longer we live with zombie banks, the harder it will be to end the economic crisis."
IE, the bank bailout is a massive money-hole where banks have become "zombie" entities that are neither "private" in the sense of being disciplined by the market nor "public" in the sense of having any obligation to the public. The present situation is one where the money that could go to either a stimulus or a tax-cut is shoveled to these "zombies" instead.
I'm not sure that a deficit of 12% of GDP (all of which has been monetized for the last half year) is "not high." If this deficit spending were actually going to financial institutions and disappearing (which is happening with much of the fed's lending of late, but primarily because the few borrowers who are qualified are not enamored with leverage at the moment), you would have a point, but our government is spending that money as it normally would: 58% of federal spending is entitlement programs, 19% is for killing people on the other side of the world, and the remaining 23% is sprinkled among programs that are each too small to be worth mentioning.
"If this deficit spending were actually going to financial institutions and disappearing (which is happening with much of the fed's lending of late, but primarily because the few borrowers who are qualified are not enamored with leverage at the moment), you would have a point..."
The Fed printing money and giving it to the bank adds to effective over-all spending and so effective deficit spending is going to the banks.
You might idly slice the size of the official Federal deficit any way you wish - high by comparison to earlier GDP ratios, low in comparison to the GDP ratios of other countries (Japan has a public debt of ~100% of GDP - funny how they have the world's highest ratio here despite their huge trade surpluses).
But this slicing doesn't mean much with the Fed and Fannie Mae's activity involving massive shoveling of money into the housing and other sectors.
And it should be clear it doesn't matter if this happens "primarily because the few borrowers who are qualified are not enamored with leverage at the moment". Indeed, the whole point is using money to prop up failing sectors makes it more likely that fewer in the private sector will want to borrow for actual productive investment.
I would agree that Krugman's pushing for larger deficit misses the elephant in the living room that is the bailout. But hey, he complained once and that's more than many did.
Like I said, this is neither Keynesianism nor Monetarism as such but a state "captured" by the various industries which suckle off it (especially defense, financial services, education, health care but also others).
You might idly slice the size of the official Federal deficit any way you wish - high by comparison to earlier GDP ratios, low in comparison to the GDP ratios of other countries (Japan has a public debt of ~100% of GDP - funny how they have the world's highest ratio here despite their huge trade surpluses).
I don't think it's fair to compare the public debt of one country to the annual deficit of another. It is akin to saying "It's alright that I put $8000 on my CC last month because Bob down the street owes $70,000." While Bob may be in dire straits, he probably didn't accumulate all that debt in the last 8 months.
Trifles aside, It's refreshing to see someone with a very different perspective from my own who realizes what is going on.
I'm afraid I just find it a little bizarre that Keynesian economics is considered in some way "left", or partisan. It's really just based on observation, and does not endorse any radical redistribution of wealth - it's designed to encourage growth and minimize recession. Right-wing economics is very real, however, and seems to be based more on a kind of moral outrage against the very notion of taxation than any empirical measure. And it seemed to be working - Clinton and Blair endorsed the very assumptions of this approach - but is looking somewhat tattered now. Has Keynesianism ever been shown to have failed? I've not seen evidence of this.
Yes - high inflation (i.e. too high, not 5%), substantial currency devaluation (not hyperinflation but worse than a mere annoyance), and especially high unemployment - higher than we have now under the market-focused orthodoxy. But it needs to be compared to a useful control. For example, if it's limited to the 1970's, it would be hard to isolate from the impact of the oil crisis. And if it's limited to the US/Britain, you need to explain why the high-spending tiger economies can be discounted.
I'm not looking for a job right now, nor am I soliciting for applicants. How many people here are? If that number is lower than the number of people interested in Bitcoin, then I don't see the problem with the hiring thread falling off the front page quickly.
HN is growing. As much as it might be nice if it strictly followed the interests of the original visitors/contributors, it's not a reasonable expectation.
Meanwhile, I downvoted all posts in this meta-discussion (if you don't like a posting, just flag it and move on -- like the site guidelines tell you to do)... and yet here I am, participating. Sigh.
(For the record, my interest in Bitcoin-related articles has waned, but I could see how it'd still be notable to others.)
The hiring thread was pushed off by all the non-hiring-thread articles on the front page, was it not? Or does the front page selection algorithm do fascinating things which made only the bitcoin stories responsible?
If the thread can't compete, why is the solution penalizing Bitcoin stories?
My perception is that if you did the histogram over thread topics yesterday, bitcoin would show itself to be overrepresented. You can do the legwork on that, you can take my word for it, or you can ask me to take your word for it that I'm wrong; all are fine options.
"Overrepresented" is a judgement call. You think bitcoins are overrepresented, but I think startup stuff is overrepresented. Neither of us is right or wrong.
Of course it can be, because as I already pointed out "overrepresented" is in the eye of the beholder. There is no empirical measure of it, its just an opinion.
Recruiters and recruiting threads are a plague wherever hackers congregate. At any given time, hiring is of interest to only a tiny fraction of people (mostly employers, not hackers), but it is of very intense interest to them. Although I sympathize with the job-hunters and job-offerers who are trying to connect, it's hardly a malfunction when their announcements get little attention.
The HN voting system is working. Whether your favorite thread receives enough votes or not is not the issue. People are obviously interested in Bitcoin. I know I am.
I'm not sure if Bitcoin will become a new currency or if something better will come along and blow it out of the water, but I do know that it is highly likely that some crypto currency will be in use in the near future, Bitcoin or not. The reaction central banks and governments have towards Bitcoin will be interesting to watch. I'm going to sit back with a bowl of popcorn and watch the disruption.
are still fascinating. I've known about those failed investment strategies since childhood, but I still see fully grown human beings falling for strategies that are no more reasonable.
>The demand for investments caused IPOs to sprout out of everything, including companies that promised to reclaim sunshine from vegetables and to build floating mansions to extend Britain's landmass. They all sold like mad.
looks like supposedly "green" technologies like ethanol from corn are back again 300 years later.
It's funny, but as a pyramid scheme it kinda sucks. When the pyramid crumbles, everybody's left with a bunch of worthless bitcoins. At least in a ponzie scheme, the people at the top profit. A lot.
But if you've been mining bitcoins since the beginning, you probably have a lot. Now mining is no longer very profitable because more people are in on it; thus, it makes sense for the early adopters to convert their bitcoins to USD at Mt Gox. They make a load of money from the late adopters, and the late adopters are left with loads of worthless bitcoins (because eventually nobody wants them and you can't sell them). Sounds more like an MLM scheme.
This could be part of the scheme, however. This is a late phase of the scheme in which the early adopters are now fully stocked up on bitcoin, and are now hyping it very successfully. Late adopters want in, but the early adopters are not selling, and the miners aren't generating much anymore. Thus, supply is severely limited and the rate skyrockets, up more than 200,000% at this point. There is no telling what heights it will reach, but it's not over yet. At some point, the early adopters will start dumping, thus completing the scheme and leaving the late adopters with absolutely nothing.
I don't believe bitcoin is an evil planned-out scheme like this, but human nature may trigger this bubble effect.
I'm no economist but my layman's understanding is this...
Early adopters have a huge incentive to convince more people to use Bitcoin. If Bitcoin is successful the value of Bitcoins is guaranteed to increase because there's a finite number of them. Because of this, naturally people will hoard their Bitcoins rather than spend them. At some point people will realize the price of Bitcoins was driven up by speculation, and it will collapse.
I'm not saying Bitcoin was intentionally devised as a pyramid scheme, but that's kind of what it looks like it's turning into.
You might be able to call it a speculative (digital) commodity bubble. And there's a possibility for this "commodity" to one day go "poof!" and disappear (gov't regulation, hackers, system failure, etc.) Only time will tell us those things.
But I don't see how you could call it a pyramid scheme.
Bitcoin does share some aspects with a pyramid scheme. Bitcoin owners have incentive to recruit into the Bitcoin network. Bitcoins aren't really good for anything until merchants willing to accept Bitcoins also join the system. And the gain of the early adopters does come from what the later joiners bring, in the form of their goods and services that they exchange for Bitcoins.
I guess where Bitcoin diverges from a pyramid is that there's no chain reaction of recruiting. Once a user spends a Bitcoin, it's done; he doesn't stand to continually gain further from what the Bitcoin recipient continues to do or from anyone else the recipient brings into the system.
Just so be clear... How exactly does this differ from any monetary system out there? A currency is not accepted until a major of people approves it. Government or not, "money" is and will always be something that human kind has invented, it does not contains any real value, it just makes it easier to trade goods.
Bitcoin marketers invariably use formal analogies to suggest that Bitcoin isn't a scam. "The early adopters benefit just like in Google, so there can't be anything wrong with that" or "If Bitcoin is a pyramid scheme, then US dollars are as well."
The problem is that these analogies neglect all context and substance. Just because some schemes that benefit early adopters aren't scams doesn't mean that all such schemes aren't scams. Just because not everything called a "currency" isn't dishonest doesn't mean that this one isn't being marketed dishonestly and without regard to the people who will lose money as a result.
What's different between Bitcoin and gold? Bitcoin has very limited history, whereas gold has a much deeper history. Gold doesn't face existential security problems; Bitcoin has faced security compromises (such as an integer overflow in the block chain) even in its short history, and these compromises have had to be corrected using out-of-band mechanisms. The Bitcoin market is tiny, subject to market manipulation, and operates through unregulated and probably illegitimate exchanges. Finally, people buy gold without most people who own it spending a good chunk of their time promoting it dishonestly to others.
Some people called it a scam, I think it could be a bubble, but a pyramid scheme it most definitely is not:
A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud. (Wikipedia)
But you could also compare it to investing in an early-stage startup. If the company you invest in gains popularity the value will increase. If you invest in the company there's an incentive to get other investors involved, as the more people wanting in on the action, the higher the valuation will go. And at time of investment, said company isn't actually generating any revenue, it's all just about future expectations.
Hence I would argue that it can be argued that Bitcoin is a bubble (i.e. equivilent to investing in a startup that is sure to fail) but not a pyramid scheme.
You're making the mistake of thinking of stock as a speculative instrument only. It's a legal claim upon the economic output of an enterprise - the speculative element is secondary to that.
Even if no market exists to resell a stock, if the company is operating it still has fundamental value, whereas something like bitcoin has no value if nobody else is willing to trade you something.
Given that, I don't think your comparison holds. Yes, a speculative market exists in stocks (and generally, anything else of value.) But the value of a stock is not based purely upon the speculative market that might exist around it - at its root, it has an underlying fundamental value that is not driven by market demand.
Similarly, lots of folks speculate in commodities, but at the end of the day, if you can't sell oil or steel, you can use them to produce other things you can sell.
>But the value of a stock is not based purely upon the speculative market that might exist around it - at its root, it has an underlying fundamental value that is not driven by market demand.
Market demand for the instrument, that is, right? :)
I don't know -- I see a difference here, but it looks only nominal.
If I purchase shares in a privately-held small business that hits tough times, my claim on the output of that company can essentially evaporate -- they won't be paying dividends as no profit exists, I might not be able to sell the stock because no market exists for it, and once the company goes belly-up they pay the bank and lenders before shareholders get anything.
I'm sure a difference exists; I'm no serious investor, so it's easy for me to not see it.
You can argue that currency is a kind of stock in the "enterprise" of the sovereign printing that currency. But is there a qualitative difference between that and bitcoin?
Currency is not a "kind of stock". It is not a claim of ownership in an asset / entity or a claim on a future cash flow stream.
It is in fact the opposite of a claim on the printing operation of the issuer, given that the more currency is printed, the less valuable the currency you hold becomes.
If nobody will accept a currency, it does not continue to have value, because its value is based upon what someone is willing to trade you for it.
I think it's an idea that appeals to a certain demographic of people who are very passionate about their interests. It actually reminds me of the Ron Paul phenomenon circa 2008. He was an interesting yet largely inconsequential politician... but his supporters were everywhere on the Internet.
It also doesn't hurt that lots of people stand to gain financially from bitcoin hype.
There should be a pithy name for this effect, the tendency of small groups of committed supporters to dominate internet conversations. I am reminded of this "100 Best Novels" list (the reader's choice version, on the right):
I find the economics dubious, but the technical aspects to be very interesting.
In particular, the use of proof-of-work chains to create an eventually-consistent global view of a distributed database is quite interesting, and I think there's applications outside of currency.
Except that most of the articles are critical of bitcoin, making others less likely to adopt it, losing those early adopters possible cash. Then again, the only thing worse than being talked badly about is not being talked about.
